Birmingham ‘disappointed’ by challenge to broadband plans

A member of Birmingham city council’s cabinet said the authority is "disappointed" at a decision by BT and Virgin Media to challenge its plans to develop its own ultrafast broadband infrastructure.

Councillor James McKay said: "The city has worked in a very positive and collaborative way with them [BT and Virgin Media] over the last few years to help inform and develop our business case and we are surprised that they have now chosen to appeal at such a late stage."

He said that broadband is an "imperfect market" and most small businesses in the Digbeth, Eastside and the historic Jewellery Quarter areas of the city are unable to receive affordable high speed broadband.

He added: "We are liaising with the government and the European Commission (EC) and we are advocating that this matter be treated with some urgency as a ‘test case’ for Europe and that everything that can be done to expedite it through the legal process is done."

EC approval is needed for government infrastructure spending to ensure that public money is not used to compete with the private sector.

In June it approved Birmingham city council’s use of £10m from the government’s Urban Broadband Fund intended bring ultrafast broadband to the city as part of its Smart City programme.

BT confirmed that it had made an application to annul the EC’s decision. In a statement the company said: "This is an unusual stepfor us to take, but we believe the decision was substantially flawed. It would have discouraged commercial investment in high speed networks at precisely the time when such investment is required. It would also have set a dangerous precedent."

A Virgin Media spokesman said that Birmingham’s scheme is "not in the interests of local people and we believe, as a result, the EC has made a decision based on inaccurate and misleading information which could waste public money".

Birmingham was expected to launch a formal procurement process, in accordance with the Official Journal of the European Union guidelines, this autumn to secure a partner for the delivery of services. It is not clear whether the procurement process will now be able to go ahead.